Audit Knocks Polk's Handling of Housing Stabilization Program

By TOM PALMERTHE LEDGER

Saturday

Oct 16, 2010 at 12:01 AMOct 17, 2010 at 12:38 AM

BARTOW | Polk County did not follow proper procurement procedures when it implemented the $14.5 million Neighborhood Stabilization Program and should end its contract with Swan Development Advisors, which was hired in 2009 to manage the program, according to federal auditors.

The audit, which was released Sept. 28 by the U,S, Department of Housing and Urban Development's Office of Inspector General, came as the result of an anonymous complaint about the conduct of the program.

Polk County officials filed a written response that disputed most of the federal auditors' conclusions, which are recommendations to HUD's Office of Community Planning and Development.

Officials at the Community Planning and Development in Jacksonville will review the county's response and determine what Polk officials should do, HUD spokesman Fredric Washington said.

Washington said Polk County would have time to correct any problems, but how much time will be allowed has not been determined.

The Neighborhood Stabilization Program is intended to renovate or demolish foreclosed homes and apartments, and sell the property to reduce blight in targeted neighborhoods.

Polk's program acquired 110 homes and apartments. Thirteen homes have been sold.

The center of the dispute in the audit appears to focus on how well county officials set up and oversaw the program and procured services as required by federal regulations, and less on whether Polk County officials, through Swan and Keystone Challenge Fund, the subcontractor Swan hired to oversee much of the work, met the program's goals and spent the money properly.

"The number and significance of the procurement violations ... bring into question the county's capacity to implement future NSP activities in accordance with competitive contracting requirements," the audit said.

County Attorney Michael Craig said Polk officials have been working with the staff at HUD's Office of Community and Planning, who he said were aware of how the county was handling the program and had not objected.

"We don't think the procurement process was flawed,'' Craig said.

In addition, the HUD audit questioned whether the procurement process was tainted by conflicts of interest.

They pointed to the fact that Keystone is an associate member of the Polk County Builders Association and that one of the members of the committee that chose Swan, which hired Keystone, was Scott Coulombe, who at the time was the association's executive director.

Craig said other companies seeking the contract had stated they planned to hire Keystone as well.

"Quite simply there is no direct or indirect financial or any other benefit at all,'' the county's audit response said.

Craig said the only problems the HUD auditors found that county officials didn't dispute involved a criticism that the mortgages for the homes should have been recorded in the county's name rather in the name of the contractor and that bidding procedures for the work the contractor purchased should have been spelled out in the contract.

The audit listed $98,550 the auditors thought were ineligible expenditures that county officials might have to reimburse.

Polk officials questioned that claim, too.

HUD's Washington office said agency officials have not decided whether or how much Polk County will have to reimburse the program.

The HUD audit also raised questions about the procedure used to hire Swan, arguing Polk officials did not properly instruct the committee that evaluated the five proposals and if the committee had followed the proper procedures, a different company would have been hired.

Polk officials disputed the allegations, responding that the selection process following county purchasing procedures and that the selection included interviews of the top three ranked companies in addition to the evaluation sheets.

[Tom Palmer can be reached at tom.palmer@theledger.com or 863-802-7535. Read more views on county government at http://county.blogs.theledger.com/. ]

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